Broadcasters Still in Search of Spectrum AnswersNAB says not enough meat on repacking bone in first FCC workshop 11/05/2012 12:01:00 AM Eastern
Only a handful of broadcasters showed up Oct. 26 for the FCC’s
first official workshop on the framework for reverse incentive
auctions. The ones that didn’t apparently didn’t miss much. According
to the National Association of Broadcasters, which had “a bunch” of
folks monitoring the proceedings online, not a great deal of new information
on repacking of stations seemed to come up.
The FCC workshop offered few definitive answers—
which is pretty much the only thing broadcasters are
looking for as they decide whether to put their most
valued commodity up for auction. But one information
point made it clear that, generally, only larger-market
broadcasters will be able to cash in on the FCC’s onetime
payout for either getting out of the business or
agreeing to share channels.
According to Media Bureau chief Bill Lake, the FCC
is mostly looking for spectrum from broadcasters in
the top 25 or 35 markets, plus another few elsewhere,
which means that small market stations who may be
the ones in nancial trouble won’t have the option of
the cash infusion the FCC has been promoting.
Gary Epstein, FCC senior adviser and co-lead of the
commission’s Incentive Auction Task Force, said that
the FCC is committed to voluntary incentive auctions
that will, 1) honor Congress’ statutory language, 2)
work to include the industry in a transparent repacking
process, and 3) provide a viable reimbursement
and transition mechanism.
Epstein told broadcasters in a speech three weeks
ago that the FCC was expecting to be able to cover all
the broadcaster and cable operator moving expenses related to the auction
with the $1.75 billion Congress set aside for those expenses.
“Our No.1 goal is to ensure that broadcasters have the information they
need and that the FCC runs a transparent and open process,” NAB spokesman
Dennis Wharton said last week. “When it comes to the involuntary
part of the auction—the forced relocation of broadcasters intoa smaller
TV band—we have yet to see much meat on the bones. We look forward
to working with the FCC to gain greater understanding of the FCC’s plan
in order to meet Chairman Genachowski’s stated goal of preserving and
enhancing a robust broadcasting industry.”
Unfortunately, broadcasters had an almost immediate opportunity to
demonstrate that value last week as many East Coast stations dropped
regular programming to go wall-to-wall with coverage of Hurricane Sandy.
The NAB has been consistently citing that first informer” mantle as a defense
against the momentum for spectrum reclamation, and Sandy offered,
sadly, a ready-made example.
“I salute the remarkable work of our radio and TV station colleagues
now putting themselves in harm’s way to keep millions of people safe and
informed on the devastation of this deadly storm,” said NAB President
Gordon Smith last week.
While the FCC’s workshop was pitched as an update for broadcasters,
according to one workshop attendee, a show of hands at the event
revealed only three others in the room—though it
was also webcast, so remote broadcaster participation
could have been larger, as apparently it was for
At the event, FCC staffers talked mostly about proposals
that had already been put out for comment,
with the nal look of both auctions and repacking
far from set. Lake made the point that this was very
much the beginning of the process.
Among the proposals/questions covered in the
Anti-collusion measures: The auction will have
anti-collusion rules to make sure bidders can’t get together
to in ate prices, but the FCC recognizes that
if stations are being given the opportunity to share
channels as an incentive for one to sell, with those
expected to be private negotiations, those broadcasters
will have to be talking and sharing information.
New channels under repacking: Unlike during
the DTV transition, stations that are moved to new
channels to free up blocks of spectrum for wireless
will not get to choose those channel numbers.
But Lake pointed out the FCC is considering allowing
stations unhappy with their new channels to apply to the FCC
to change them.
Timing: Lake said the repacking transition process presents challenging
timing issues. Along with asking whether there should be a hard date or a
phased transition, the FCC is planning for an 18-month transition, pointing
out that some TV stations in the 2009 DTV transition made the switch
in 12 months.
Money: The FCC has $1.75 billion to cover any broadcaster and MVPD
moving expenses. The FCC has proposed various compensation plans,
including upfront payments based on market size, a partial payment and
“true up” after the real costs are incurred or waiting until the expenses are
led and reviewing them.
In all these plans and suggestions, the FCC is looking to make the auctions
as easy for and attractive to broadcasters as possible. Epstein has said
that most of the complexity will be “under the hood,” and the province of
FCC staffers rather than broadcasters.